How Everyone Benefits from Trump’s Tax Reforms
When people hear the words “progressive taxation,” they are comforted by the notion that the wealthy will be paying their fair share in taxes. After all, this is the main purpose of the progressive tax system we have in America.
However, crucial questions must be answered in order to deduce whether this system is profitable, or even equitable, for our country.
Firstly, is the progressive tax system truly proportional in terms of the amount of money each individual pays based on their income? Secondly, does the progressive tax system foster sustainability and encourage growth for our country? Unfortunately, despite the numerous promises Democrats have made in regards to this destructive tax system, both the proposed questions can be answered with a substantiated “no.” Because the progressive tax system has ultimately hindered growth and prosperity in our country, it is appropriate that drastic changes be made. These changes can be found within the Trump administration’s current tax plans, both for individuals and corporations.
It is imperative to analyze why the current tax system has ultimately failed our country and our fellow Americans. By placing such high tax burdens on the wealthy, our government discourages any substantial investments into the American economy, as well as limits consumer spending, which is a necessary stipulation for economic growth. Furthermore, the prospect of high taxation discourages hard work, devotion and entrepreneurial spirit from evolving. It is thus necessary to find a more equitable and profitable taxation model, and this can be found in President Trump’s tax plan.
To alleviate the economic strain that many low-income households are subjected to, Trump plans on relieving 75 million households from paying any income tax whatsoever. This is extremely beneficial, as it allows these households not only to retain more disposable income that they can use to better their lives, but this remedial economic effect should allow for an increase in personal savings. By increasing savings, low income households retain the possibility and hope of one day achieving a better life for themselves and their children. Trump also plans to simplify our current tax code, which consists of seven progressive tax brackets. By reducing the number of brackets to four, Trump allows for a more equitable tax system that ensures a relative amount of proportionality across all income levels.
In the realm of corporate taxes, Trump hopes to lessen the taxation burden on American corporations and businesses, which will hopefully spur economic growth and create a tremendous amount of jobs. Trump plans to cut the corporate tax rate from 40 percent (the highest rate in the world), to 15 percent, which will allow businesses to expand quicker, create more jobs and consumer products, lower the price of their goods and services, and most importantly, stop the debilitating process of corporate inversions.
Despite these ingenious and prosperous ideas, many critics speculate that Trump’s tax agenda will lead to higher deficits, and ultimately, lead to an uncontrollable national debt (although quite frankly, we already have one). To pacify these critics, Trump proposes to enact the three following measures to ensure that unnecessary deficits will not be created: First, lucrative loopholes that the wealthy take advantage of will be eliminated. Second, there will be a 10 percent repatriation fee imposed on any business that wants to bring earnings back into the U.S., and there will be an ending of the deferrals of taxes on income earned abroad. Third, corporate loopholes that cater to special interests will be eliminated. Trump’s tax plan does not inflict harm upon the rich, discriminate against the poor, or burden the middle class. Instead, it fosters economic growth, taps into the unlimited potential of our citizenry, and creates a plausible pathway for all Americans to enrich themselves.
The Obama administration’s disastrous economic policies have wreaked havoc upon our country. Obama was the first president since the Great Depression not to reach an annualized GDP growth of 3 percent. He accumulated more debt than all the previous presidents combined. $2.5 to 5 trillion remain overseas as a product of corporate inversions. This is a direct result of the myriad of restrictions and high tax rates that the Obama administration implemented. Also, since fiscal year 2000, the paperwork burden for businesses has increased by 45 percent, to more than 10.6 billion hours. Not only is this very costly, but it also stifles corporate growth and diminishes valuable time that can be used for developing productive and profitable business ideas.
It is quite easy to see the economic ruin that is imminent given America’s current conditions. It is therefore crucial that we reform our current tax system with President Trump’s proposals, and I am confident that we can make America’s economy great again.
Jonathan Ellett is a first-year economics major. He can be reached at email@example.com.